September 19, 2008, 1:51 pm
Toshiba Chops Outlook; Would They Really Bid For SNDK?
Posted by Eric Savitz
In case you happen to think that Toshiba is going to outbid Samsung for SanDisk (SNDK), you ought to take note of the company’s currently grim view of the NAND flash memory market.
In fact, as Bloomberg reports, Toshiba today cut its full-year net income forecast for the March 31 2009 fiscal year by 46 percent to 70 billion yen, which would be a four-year low. The company also cut its sales projection by 3.8% to 7.7 trillion yen, and its operating profit forecast by 48% to 105 billion yen.
Toshiba is the world’s second-largest producer of NAND flash memory chips. The company said its semiconductor division will lose 65 billion yen for the year due to weak NAND pricing. Already this year, the company said, NAND prices have dropped 52%. The company expects the memory business to improve to break-even in the second half of the fiscal year.
There has been significant speculation on the Street that Toshiba might outbid Samsung for SanDisk, given the Toshiba/SanDisk joint venture in NAND production. But analysts also have pointed out that Toshiba has a highly leveraged balance sheet and might have difficulty raising the capital for a SanDisk bid.
SNDK today is up 44 cents, or 2%, to $22.93. SanDisk this week rejected a $26-a-share cash bid from Samsung as too low. |
